Artists Spot the difference
In the wake of the recent hubbub from well-known musicians like David Byrne and Thom Yorke, Spotify has launched Spotify Artists, (spotifyartists.com), an informational website that aims to show musicians in a transparent way how they get paid. Wow, that only took about five years.
While Spotify and streaming looks like the way forward as a way of listening to music, information around payments per stream was, until now, derived from artist statements received via a third-party service, never from Spotify directly.
The site naturally takes an optimistic PR stance on its quest to get music fans to pay for music again and its plans to pay all artists more as they add premium subscribers (40 million is the goal, they're at six million).
They say that they've paid $500m in royalties this year so far, that they pay out 70pc of their revenue and say that a "niche indie album" has earned $3,300 in July 2013 though doesn't explain if niche here is Arcade Fire or Ariel Pink.
The important stuff includes them explaining exactly how they determine what gets paid out to artists. There is no fixed per-play rate, for example, meaning an artist's cut in any given month depends on other factors like the artist's total streams divided by total streams and Spotify's monthly revenue.
It also pays up to 70pc of royalties to those who hold the master recording and publishing rights to those songs. That's record labels and organisations like MCPSI and IMRO here to you and me, who pass that on to the artist.
Even better for artists, Spotify launched an analytics tool which can give artists direct access to their listening data. In the old days, artists were obscured from any of this transparency by older paper models that took months due to bureaucratic systems and manually generated reports.
That overdue transparency is a step in the right direction, especially for artists, who can now arm themselves with real information about their stream data and who will be in a greater position to negotiate better streaming deals with labels in future.